Internet Age Redefines Music Industry, Encourages Interactivity

As the legendary Bob Dylan would attest, the times are a changin' in
the music industry. In fact, they've already changed. Ever since the
original Napster took the Internet by storm back in 1999, physical
record sales have been slipping while music consumption has been
growing. The RIAA has put up a vicious fight over the years to stop
what it calls rampant online piracy, while artists at large seem to be
benefiting from a larger audience and more expensive live shows.

Today, a full decade since Napster's birth, things are quite a bit
different. The labels have finally learned that DRM simply isn't the
way to do business, and even the online megastore that is iTunes has
decided to sell music with no DRM restrictions attached. But aside from
the process of acquiring music, something else is changing. More and
more, consumers are turning to the world wide web to get updates on
music, purchase/download music and find out about new artists and
tunes. Live show portals such as JamBase and PollStar have seen record
growth as fans look to link up with their favorite artists and consume
real-time information about new live shows, new interviews, concert
reviews and new albums/songs.

In short, the Internet age is redefining the music industry at large,
and while the RIAA once felt that the web would be the death of music,
maybe it's just the death of the CD. As we saw just a few weeks back,
some 25% of all music sales now happen through iTunes. There's no
denying that consumers are embracing the digital download, giving Apple
reason to create its "Cocktail" music formula that will likely bring
more interactivity to the process at its California press event next
month. At a Bandwidth Conference this week, Gracenote vice president of
product and content management Stephen
White noted that the Web 2.0 technologies available now were really
there to "empower the consumer and the artist," proving that the
Internet is indeed an asset to both parties.

Gracenote is just one of the outfits looking to make music more
interactive. For example, the company's recently release CarStars
system enables consumers to generate playlists based on the moment,
giving them songs that accompany a coastal road trip or the celebration
of a birthday. White asserts that he's looking to to a future where
music experiences are far better than today, and more importantly, more
"holistic." Then there's Creative Allies, which hopes to let artists
give fans the ability to design and create things like band posters and
tee-shirts, not to mention music videos and biographies. It's about
putting the power into the hands of the consumer, and by doing that,
labels could generate more buzz about an artist to encourage online
album sales and live show attendance.

There's little double that avenues such as Facebook, Twitter and
MySpace have transformed the way listeners interact with artists. In
many cases, Twitter allows common fans to see exactly what their
favorite artists are thinking/doing on a day-to-day basis. How's that
for keeping someone's attention? We also think live shows have a long
ways to go in the interactive department; imagine if you could text a
vote at a show for the band's encore song. If you were a fan of any
kind, you'd probably be inclined to show up just to see if your song
was selected.